Trump v Reman: the NAFTA flashpoint

Trump v Reman: the NAFTA flashpoint

  • December 19, 2016
  • ReMaTec News
  • Policy Views

From January there will be a new face in the White House: finding out what the ‘Trump effect’ will be on remanufacturing is now the top priority for the industry in North America – and elsewhere.

US president-elect Donald J. Trump is about to get his feet under the desk in the Oval Office. Remanufacturing is among the industries looking anxiously at his past record to see which of his policies are likely to affect them. As he has never held a governmental position before, there is little to go on apart from “Build the wall!” and “Lock her up!”, the two most memorable slogans from Trump’s election rallies. He has talked about keeping US jobs in the US rather than losing them to lower-cost overseas markets - but while the offshoring of operations in cheaper countries is common in mass production, it is less so in reman.

However, Trump has frequently criticised the North American Free Trade Agreement (NAFTA) – which links the US, Canada and Mexico - and has said he will withdraw from the Trans-Pacific Partnership (TPP) on his first day in office. The TPP, a 12-nation trade pact designed to liberalise the flow of goods among countries in the Pacific Rim, including Japan and Vietnam, may not be such a big deal for reman.

Although signed, it has never been ratified. “I think he will kill the TPP but that didn’t do very much for reman anyway,” APRA president Joe Kripli tells ReMaTecNews. But NAFTA is very different. “One thing NAFTA has allowed us is freedom of moving cores across borders,” he continues. “If NAFTA goes, there will have to be a lot more bargaining with customs authorities. Taking that away would hurt.”

Another potential concern for reman is the Federal Vehicle Repair Cost Savings Act, signed into law last year by Trump’s predecessor Barack Obama. It requires the head of each Federal agency to encourage the use of reman vehicle components to maintain agency vehicles, if using them reduces cost while maintaining quality. But isn’t telling people what they can and cannot buy the sort of government intervention that Trump is against? “No, I think it plays right into his thinking about lowering the cost of government,” counters Kripli. “He is very much for that. I don’t see him touching the Act.” Yet Trump is, in effect, a blank canvas. He has already cooled on the idea of a) physically separating the US from Mexico; and b) imprisoning his election opponent Hillary Clinton. This means there may be room for reman to manoeuvre on NAFTA, for example. As Kripli concludes: “Reality is hitting and he’s thinking: ‘I’ve got to negotiate delicately down these avenues’.

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